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WE CREATE WELFARE FOR THE WHOLE SOCIETY

Kesko and K-retailers are significant employers, taxpayers and service providers. Their operations create welfare for the whole society.

  • Kesko develops trading sector services
  • employs people and creates new jobs directly and indirectly
  • purchases, sells and arranges the manufacture of products
  • is a financially sound investment
  • identifies the impacts of its operations and operates sustainably

From the point of view of the wellbeing of the national economy, Kesko is the fourth most important company in Finland (source: Prime Minister’s Office, Report 1/2015). Kesko’s direct impact on the Finnish gross national product is nearly 1%. And taking account of the multiplier effects through purchases of Finnish products, transport and other services, Kesko’s total contribution rises to several per cent. In addition to this, the K-retailer entrepreneurs have a significant impact on the Finnish national economy.

Kesko's operations generate economic benefits for shareholders, personnel, retailers, suppliers of goods and providers of services, customers, municipalities and states.

Kesko’s chain operations comprise over 1,500 stores in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia and Belarus. About half of the Finnish population live within less than a kilometre of a K-food store.

Financially sound investment creates shareholder value

Kesko’s share capital is divided into A and B share series, and the shares are listed on Nasdaq Helsinki. Most of the large shareholders are long-term owners of Kesko. There are several retailers among the large shareholders.

Kesko’s financial position is very strong. At the end of 2015, Kesko’s liquid assets were around €887 million and the balance sheet was net debt-free, which provides an excellent basis for Kesko’s development.

The yield of a Kesko B share has increased by an average of 3.0% per year during the past five years. Kesko was listed on the Helsinki Stock Exchange in 1960. Kesko is a good dividend payer: it has distributed dividends every year except for one (1967) since it was listed.

 

Stakeholder address:
Kesko.fi one of the best at meeting expectations

Corporate websites are the most important and most frequently used source of information about companies. Kesko manages to meet the high expectations of stakeholders.

Comprend conducts an annual webranking to examine what investors and jobseekers expect from companies’ digital communications, mainly on their corporate websites. The research shows that corporate websites are the most frequently used source of information about listed companies, according to investors. In addition to the investors, stakeholders such as jobseekers and customers are also likely to go to the corporate website or look for the company on other digital channels.

Expectations are high among all stakeholder groups ─ it is not enough to simply publish official reports and press releases. The website needs to cater to those who are looking for detailed information, as well as those who are looking for an introduction to the company.

When measuring the performance of more than 800 corporate websites belonging to the largest listed companies in Europe, Kesko’s website took second place. It is the best performing corporate website in Finland and within its sector. This means that it provides the majority of information sought by stakeholders.

Kesko is particularly good at providing information about the company and how it is governed. In fact, it is one of the most transparent companies in terms of matters such as providing details about the company's remuneration policy, the work of the Board and the company's lobbying policy. Kesko also received full points for its ‘About us’ section and a near-perfect score for its ‘Careers’ section.

Helena Wennergren, Head of Research, Comprend

Read more about Comprend's Webranking.

 

Read more
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The K-Group’s taxes benefit society

Kesko is a significant taxpayer: in addition to paying income and real estate taxes, Kesko collects, reports and remits indirect taxes, such as value added taxes and excise duties.

It is Kesko’s principle that taxes on operating income and assets are always paid to the relevant operating country in compliance with local laws and regulations.

The impact of the K-Group and its around 40,000 employees on the municipal sector is substantial. Municipal taxes paid by employees account for a considerable proportion of municipalities’ tax revenue.

In 2015, there were K-food stores in 270 municipalities in Finland. Real estate taxes on the business premises used by Kesko and the K-Group are paid to the municipalities in which the premises are located. Some of the income taxes from Kesko’s and K-retailers’ entrepreneurial activities are distributed to those municipalities where the activities take place.

Read more about taxes in the economic impacts section.

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in action:
K-rauta Russia supports children’s homes in Russia

K-rauta Russia participates in responsibility work by supporting children’s homes and correctional boarding schools in Russia. During workshops in autumn 2015, employees of K-rauta Russia and children made birdhouses and jewellery boxes together.

K-rauta Russia began providing assistance to one children’s home in St. Petersburg in 2013. The good results of this encouraged employees to offer assistance elsewhere and, in the following year, the work was expanded to the Nepetsinsky children’s home, located in the Moscow region.

“We regularly organise events to raise funds to buy gifts and equipment. Our summer event and the one before Christmas and the New Year can already be called a tradition. We have used the funds we have raised to buy clothing, hygiene supplies and Christmas gifts for the children,” says Vera Kalmychkova, HR Director of K-rauta Russia.

In autumn 2015, K-rauta Russia organised a workshop day event in St. Petersburg with the aim of teaching children useful, practical skills. A total of 16 employees of K-rauta Russia and more than 50 children from the Vsevolozhskaya correctional boarding school participated in the event.

”The day was full of enthusiasm, laughter, warmth and inspiration! The atmosphere at the workshops was incredible − something difficult to put into words. At one of the workshops, children prepared salads, at another they made jewellery boxes, at the third one they made birdhouses, and much more besides. It was a great day for the children and also for the supervisors!” says Vera Kalmychkova.

We care!

K-rauta Russia brought its responsibility work into a uniform programme in the spring of 2015. The name of the programme – We care! – illustrates the purpose of the programme: we take responsibility for everything we do and influence.

The programme has five themes:

  • Environmental protection
  • Charity
  • Working conditions
  • High level customer service
  • Responsible business
Read more
Suppliers are important partners

Most of the economic benefits generated by Kesko’s operations – approximately 85% of Kesko’s net sales – flow to suppliers of goods, from which purchases were valued at €7.4 billion in 2015.

In 2015, Kesko had around 21,100 suppliers and service providers from which Kesko made purchases valued at over €1,000 during the year. Of these, around 9,800 operated in Finland, around 8,100 in Kesko’s other operating countries, and around 3,200 elsewhere.

Purchases of Finnish products and services generate economic benefits to our country and promote local work.

In 2015, the purchases of all Kesko companies from suppliers of goods operating in Finland totalled €4,956 million, accounting for 67.2% of the Group’s total purchases. K-retailers’ direct purchases from Finnish regions totalled €610 million.

Pirkka products are manufactured by nearly 170 companies across Finland. Their manufacture, or the inclusion of a manufacturer’s own product in Kesko's grocery trade selections provides many regional companies with an opportunity to expand their market to cover the entire nation. Some examples of such companies and products are:

  • SIM Finland Oy in Ylöjärvi with their Pirkka Argan skin care product range and Pirkka VOL. hair care products
  • Aguila Ky in Espoo with their Pirkka milk free ice creams

The success of the Finnish retail trade also provides national manufacturers with opportunities to expand outside Finland. For many Finnish companies, Kesko’s home improvement and speciality goods trade is a distribution channel and a partner for taking their products and services to international markets.

IMPACTS OF KESKO’S OPERATIONS ON FINNISH REGIONS

  € million
Kesko’s purchases of goods 4,929.6
K-retailers’ direct purchases of goods 610.0
Kesko’s and K-retailers’ capital expenditure* 178.9
Salaries paid by Kesko 365.7
Salaries paid by K-retailers 384.2
Taxes paid by K-retailers 34.9
Total 6,503.4

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 50.2
K-retailers’ direct purchases of goods 24.7
Kesko’s and K-retailers’ capital expenditure* 3.9
Salaries paid by Kesko 7.7
Salaries paid by K-retailers 18.5
Taxes paid by K-retailers 1.7
Total 106.8

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 44.0
K-retailers’ direct purchases of goods 13.0
Kesko’s and K-retailers’ capital expenditure* 2.6
Salaries paid by Kesko 1.4
Salaries paid by K-retailers 4.8
Taxes paid by K-retailers 0.7
Total 66.6

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 5.9
K-retailers’ direct purchases of goods 6.9
Kesko’s and K-retailers’ capital expenditure* 0.6
Salaries paid by Kesko 1.0
Salaries paid by K-retailers 6.4
Taxes paid by K-retailers 0.4
Total 21.2

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 65.8
K-retailers’ direct purchases of goods 23.4
Kesko’s and K-retailers’ capital expenditure* 4.3
Salaries paid by Kesko 4.0
Salaries paid by K-retailers 11.1
Taxes paid by K-retailers 0.9
Total 109.5

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 45.5
K-retailers’ direct purchases of goods 17.6
Kesko’s and K-retailers’ capital expenditure* 0.7
Salaries paid by Kesko 4.5
Salaries paid by K-retailers 11.1
Taxes paid by K-retailers 1.1
Total 80.6

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 13.6
K-retailers’ direct purchases of goods 25.6
Kesko’s and K-retailers’ capital expenditure* 5.5
Salaries paid by Kesko 4.9
Salaries paid by K-retailers 18.0
Taxes paid by K-retailers 1.9
Total 69.4

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 24.4
K-retailers’ direct purchases of goods 26.0
Kesko’s and K-retailers’ capital expenditure* 3.3
Salaries paid by Kesko 3.7

Salaries paid by K-retailers

11.6

Taxes paid by K-retailers 1.4
Total 70.3

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 104.2
K-retailers’ direct purchases of goods 44.5
Kesko’s and K-retailers’ capital expenditure* 14.6
Salaries paid by Kesko 14.2
Salaries paid by K-retailers 25.6
Taxes paid by K-retailers 2.2
Total 205.4

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 132.8
K-retailers’ direct purchases of goods 36.2
Kesko’s and K-retailers’ capital expenditure* 3.0
Salaries paid by Kesko 9.7
Salaries paid by K-retailers 20.4
Taxes paid by K-retailers 1.4
Total 203.6

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 140.1
K-retailers’ direct purchases of goods 11.4
Kesko’s and K-retailers’ capital expenditure* 3.6
Salaries paid by Kesko 4.0
Salaries paid by K-retailers 8.6
Taxes paid by K-retailers 0.8
Total 168.4

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 253.1
K-retailers’ direct purchases of goods 32.6
Kesko’s and K-retailers’ capital expenditure* 6.5
Salaries paid by Kesko 23.8
Salaries paid by K-retailers 33.9
Taxes paid by K-retailers 2.7
Total 352.6

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 126.2
K-retailers’ direct purchases of goods 26.3
Kesko’s and K-retailers’ capital expenditure* 10.3
Salaries paid by Kesko 8.0
Salaries paid by K-retailers 12.0
Taxes paid by K-retailers 1.2
Total 184.0

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 112.1
K-retailers’ direct purchases of goods 27.0
Kesko’s and K-retailers’ capital expenditure* 2.5
Salaries paid by Kesko 4.2
Salaries paid by K-retailers 15.0
Taxes paid by K-retailers 0.9
Total 161.7

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 4.7
K-retailers’ direct purchases of goods 14.5
Kesko’s and K-retailers’ capital expenditure* 10.5
Salaries paid by Kesko 3.7
Salaries paid by K-retailers 11.1
Taxes paid by K-retailers 0.6
Total 45.0

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 240.1
K-retailers’ direct purchases of goods 33.5
Kesko’s and K-retailers’ capital expenditure* 0.8
Salaries paid by Kesko 4.3
Salaries paid by K-retailers 12.4
Taxes paid by K-retailers 0.7
Total 291.8

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 33.2
K-retailers’ direct purchases of goods 14.4
Kesko’s and K-retailers’ capital expenditure* 1.7
Salaries paid by Kesko 3.7
Salaries paid by K-retailers 11.1
Taxes paid by K-retailers 1.3
Total 65.4

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 2,852,2
K-retailers’ direct purchases of goods 162.3
Kesko’s and K-retailers’ capital expenditure* 94.3
Salaries paid by Kesko 242.6
Salaries paid by K-retailers 116.8
Taxes paid by K-retailers 11.4
Total 3,479.6

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 653.0
K-retailers’ direct purchases of goods 70.2
Kesko’s and K-retailers’ capital expenditure* 10.2
Salaries paid by Kesko 20.4
Salaries paid by K-retailers 35.7
Taxes paid by K-retailers 3.4
Total 792.9

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

  € million
Kesko’s purchases of goods 28.5
K-retailers’ direct purchases of goods -
Kesko’s and K-retailers’ capital expenditure* 0.1
Salaries paid by Kesko -
Salaries paid by K-retailers -
Taxes paid by K-retailers -
Total 28.6

The figures are for those K-retailers whose accounts and payroll are managed by Vähittäiskaupan Tilipalvelu VTP Oy, representing around 85% of K-retailers’ total business volume.

* Incl. increase in lease liabilities of K-retailers' equipment

See section ’Economic impacts’ for a table on the economic benefit generated by Kesko and K-retailers to Finnish regions.

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The K-Group creates jobs

At the end of 2015, Kesko had 21,935 employees. In all, the K-Group, i.e. Kesko and K-retailers, employ around 40,000 people.

Jobs vary from retail store duties to retailer entrepreneurship and specialist and supervisory jobs in various fields.

The K-Group annually employs thousands of summer employees, job trainees, young people for short-term orientation to working life and for short-term jobs called ’Learn and Earn’. Most of these jobs are in retail stores but Kesko’s various functions also regularly employ trainees.

In recent years, the K-Group has launched initiatives to employ special groups:

  • In 2012, the K-Retailers’ Association launched a project called ’Many kinds of performers’ in cooperation with the Finnish Association on Intellectual and Developmental Disabilities (FAIDD). A permanent operating model was created for the employment of intellectually and developmentally disabled people.
  • In 2013, Kesko and the K-Retailers' Association launched the Youth Guarantee in the K-Group programme, the aim of which was to offer a job, a work trial or an apprenticeship in the K-Group to 1,000 young people aged under 30 and at risk of social exclusion by the end of 2014. The target group also included young immigrants and young people with disabilities. By the end of 2015, more than 2,500 young people had found employment in the form of a work trial, through wage support and apprenticeship training. Employment of young people and special groups continues as a permanent model.

in action:
K-trainee programme – a view to international trade

”A couple of years ago I couldn’t have imagined that I would be actively participating in developing Kesko’s international business in St. Petersburg,” says K-trainee Leena Fedotov.

The fifth K-trainee programme began in June 2014 and ended in autumn 2015. From among hundreds of applicants, 11 students were selected for the K-trainee programme. The students were either at the final stages of their studies, recent graduates or those already employed. They all had a university or polytechnic degree.

This year’s K-trainee programme was the first one to provide an opportunity to assume a position of responsibility in the K-Group’s Russian companies. Leena Fedotov, a K-trainee in the grocery trade, moved to Kesko Food Rus in St. Petersburg after a few months in Finland.

”During the K-trainee programme, I learned that the key to retailing is the customer and fast reaction to changes. The K-food stores in St. Petersburg and the retail store management based on a centralised model differ from that in Finland. Most of the service counter’s selection is actually made in the store, and most of our stores are open 24/7", says Leena Fedotov.

According to Leena, the best aspects of the K-trainee programme were the continuous process of learning something new and networking.

When the programme is over, K-trainees quickly progress to trading sector managerial posts in Finland and other countries. After completing the programme, Leena was appointed as project manager to Kesko Food Rus in St. Petersburg.

“The job is very interesting and I have plenty to do. Kesko Food Rus is a true vantage point to getting things done!” Leena says, pleased.

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